The Netherlands' tax incentive scheme (CVs) for film production, which has been in place for the last five years, looks set to close. Proposals for the new state budget were published yesterday and made no allowance for the continuation of the scheme.

Separately, a government-commissioned report into the CV system was due to have been published yesterday. But the report compiled by management constancy group Berenschot was not made public after disagreement between the ministries of Culture and Finance on the report's final text.

Commissioned by the ministry of finance, the Berenschot report was widely expected to present a negative picture of the Dutch film industry's ability to stand on its own two legs. Film officials argue that the stimulus package was never intended to create an independently functioning film industry in the first place.

Although the country is teetering on the brink of economic recession and the government has announced across the board cuts in state spending, the film industry still hopes that something can be salvaged. It is counting on members of parliament asking for a continuation of the CV incentives in the forthcoming weeks of budget debate.

With the tax break in danger of disappearing on Dec 31, at least one international co-production risks being postponed or restructured. Meltdown, an English-language film produced by Mulholland Film (Left Luggage, The Discovery Of Heaven) was counting on Euros 16m from the tax breaks and may now be delayed pending clarification of the CV system. To have been directed by Drop Dead Fred-director Ate De Jong, the film had secured a tranche of funding in the form of a minimum guarantee from August Entertainment.

Another Erik, Of Het Klein Insectenboek, a Dutch children's film being produced by Egmond Film (Antonia's Line, Mrs Dalloway) a co-production with France's Haut Et Court and Germany's Tradewind depends on the tax incentive for Euros3m. The project is scheduled to be open to investors next week, but will have to start shooting before the end of the year in order to profit from the ruling.